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Importers/Exporters Inc. wants to underwrite a stock issue for the purchase of $21 million of new equipment. Management estimates the issue will cost the firm $320,000 for accounting, legal, and other costs. The underwriting spread is 7.5% and the issue price is $22/share. How many shares of stock must be sold to receive sufficient funds to purchase all the equipment?
908,010
1,021,121
1,047,666
1,147,666
1,151,333
Discuss the following statement: “The cost of retained earnings is less than the cost of new outside equity capital. Consequently, it is totally irrational for a firm to sell a new issue of stock and to pay dividends during the same year.”
Calculate the annualized forward premium or discount on six-month forward yen and calculate the profitability of each of BLP's five subsidiaries.
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Warren Buffet has been earning an annual rate of return of 20.5% since he started his investing company. Assume that Londo Mollari put a lump-sum $25,000 under Warren Buffet’s management since 1970, how much money would he have by Year 2010? FV = $43..
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Aqua System Inc. expects to have $23,646,500 in credit sales during the coming year. Currently all checks are sent to the home office. A proposed lockbox system can eliminate 2 days of float, releasing funds which, when invested, will earn 14.64 perc..
Determine the return on equity under the three different capital structures as the result of the 20 percent increase in expected EBIT.
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